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Picture: 123RF/TOM BAKER
Picture: 123RF/TOM BAKER

Beijing — Nanjing has eliminated curbs on home buying, the first big Chinese city to do so, as policymakers scramble to arrest a deepening crisis in the massive property sector, which is weighing on the world’s second-biggest economy.

China’s authorities in recent weeks have rolled out a series of measures, such as easing borrowing rules, to support the debt-riddled property sector, which accounts for one-quarter of China’s economic activity, but analysts say the steps are unlikely to reverse the slide.

Reuters reported last week that cities such as Beijing, Shanghai and Shenzhen could ease housing curbs as part of a months-long effort by regulators including the housing ministry, central bank and financial regulator.

China’s property sector has been on a downward spiral since 2021, when the government took steps to stop developers from accumulating debt. The latest blow has been major developer Country Garden’s struggle to avoid defaulting on domestic and offshore debt, as fears grow that the crisis could spread to the financial sector and derail a sputtering economic recovery.

Nanjing, among China’s 10 biggest cities, said in a notice late on Thursday it would let people buy flats without proof of eligibility in four districts, easing its last restrictions on home purchases.

Other municipalities are likely to follow the city of 9.5-million in relaxing all restrictions, said Yan Yuejin, director of E-house China Research and Development Institution, who could not recall any major city having done so previously.

Nanjing’s move indicates property easing will continue, playing an important role in stimulating home-buying and changing expectations in the sector, Yan said.

Many smaller locales have eased home-purchase curbs over the past two years, but major cities — traditional targets of speculative buying — had held off.

China’s new home prices are likely to not rise this year, a recent Reuters poll found. Nanjing’s new home prices fell for a third consecutive month in July from the previous month, while resale home prices were down for the 15th month from year-earlier levels.

Nanjing also cut the maximum down payments for first home purchases to 20% from 30% for commercial mortgages, state broadcaster CCTV said on Thursday, compared to 30%-35% in most major cities.

Reuters

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